Secret Hospital Charges Now Revealed, Wide Disparities

When a patient arrives at Bayonne Hospital Center in New Jersey requiring treatment for the respiratory ailment known as COPD, or chronic obstructive pulmonary disease, she faces an official price tag of $99,690.

I encourage you to read the rest of the article and join in the conversation here at HuffPost. What follows is one more snippet from the article any my personal perspective.

Overhaul of Taxes & Fees

Upper-Income Households — Starting Jan. 1, individuals making more than $200,000 per year, and couples making more than $250,000, will face a 0.9 percent Medicare tax increase on wages above those threshold amounts. They’ll also face an additional 3.8 percent tax on investment income. Together these are the biggest tax increase in the health care law.

Employer Penalties — Starting in 2014, companies with 50 or more employees that do not offer coverage will face penalties if at least one of their employees receives government-subsidized coverage. The penalty is $2,000 per employee, but a company’s first 30 workers don’t count toward the total.

Health Care Industries — Insurers, drug companies and medical device manufacturers face new fees and taxes. Companies that make medical equipment sold chiefly through doctors and hospitals, such as pacemakers, artificial hips and coronary stents, will pay a 2.3 percent excise tax on their sales, expected to total $1.7 billion in its first year, 2013. They’re trying to get it repealed.

Insurance Industry — The insurance industry faces an annual fee that starts at $8 billion in its first year, 2014.

Pharmaceutical Companies — Pharmaceutical companies that make or import brand-name drugs are already paying fees; they totaled $2.5 billion in 2011, the first year.

People Who Don’t Get Health Insurance — Nearly 6 million people who don’t get health insurance will face tax penalties starting in 2014. The fines are estimated to raise $6.9 billion in 2016. Average penalty in that year: about $1,200.

Indoor Tanning Devotees — The 10 percent sales tax on indoor tanning sessions took effect in 2010. It’s expected to raise $1.5 billion over 10 years. The 28 million people who visit tanning booths and beds each year – mostly women under 30, according to the Journal of the American Academy of Dermatology – are already paying. Tanning salons were singled out because of strong medical evidence that exposure to ultraviolet lights increases the risk of skin cancer.

Editor’s Perspective

This article reinforces the excellent work of Steven Brill, who wrote a 38-page special report for TIME Magazine. It also generated thousands of reader responses, so I recommend going to HuffPost to browse through them and to join in the discussion. Below are a few of the responses I posted.

COMMENT: This new government report is in line with Steve Brill’s 38-page TIME Magazine special report, “Bitter Pill: Why Medical Bills are Killing Us.” Brill described the lack of competition in healthcare and also puts much of the blame on the charge-master. He even says that non-profit hospitals often have the highest prices. For a much shorter summary and a video intro, see www.mhealthtalk.com/2013/02/why-high-medical-bills-are-killing-us/.

COMMENT: Docs & nurses generally have the patient’s best interests in mind, but others in the healthcare system (hospitals, insurers, pharma, testing companies & equipment providers) have perverse incentives to keep patients as paying Customers, treating symptoms and profiting from each visit, test, procedure & prescription. They don’t want you to die but don’t seem to want you better either, because they’re only paid when you’re sick. It’s a Sick-Care system, not a healthcare system.

COMMENT: We currently spend over $2.8 trillion/year on healthcare and could save over $1 trillion with universal healthcare, more emphasis on wellness, addressing the drug patents issue, and helping seniors age-in-place rather than in nursing homes. BUT… That’s an awful lot of money that someone in our sick-car system will no longer get, and they’ll fight like hell to keep what they think they’re entitled to. The problem then comes down to the corrupting influence of money in politics and the fact that the medical industrial complex spends three times more on lobbying than the military industrial complex, which only makes about $1.7 trillion/year.

I commented… Americans pay twice as much as other industrialized nations but live sicker and die younger, according to the World Health Organization and others.

Private insurance really adds nothing to healthcare but costs, and if it were replaced by a national single-payer system (like Medicare for all), we could save $1 trillion/year. But the medical industrial complex would fight like Hell against it, rather than loose that revenue. So, reforms have to come slowly, and we have to shart with changes in Congress.

You’ve got to dig below the simple Liberal v. Conservative rhetoric to the real cause of our high healthcare costs and why Obamacare doesn’t (yet) have a single-payer public option. Here are two places to start.

Read the 3/4/2013 TIME Magazine special report by Steve Brill. He should win a Pulitzer Prize for exposing the source of high costs and putting most of the blame on hospitals, along with insurers, drug companies, testing companies, and equipment providers. Unfortunately, his excellent 38-page report is now behind a subscriber firewall. But you can still find a print version in the library or read a summary and watch Brill’s intro video at http://www.mhealthtalk.com/2013/02/why-high-medical-bills-are-killing-us/.

I believe it comes down to getting the incentives right. Here in America, we have a Disease Management system with the perverse incentive of keeping patients as paying customers by treating symptoms rather than preventing the need for medical care in the first place. A true Health Care system would stress health & wellness to avoid high medical costs.

Note that the most significant health benefits have come from public health initiatives like clean water, sewage treatment, and immunizations. Public health officials have incentives to keep the population healthy, and as a nation, our focus SHOULD be on maintaining a skilled, healthy and productive workforce, simply for economic reasons if no others.…

Two more points: (1) You can’t shop around when you’re unconscious. (2) Your total hospital bill is a collection of smaller bills, making it nearly impossible to comparison shop, except for a simple procedure.

Billing for a hospital stay might be compared with piece-meal billing for a new car. Imagine shopping for a car and not knowing ahead of time what it will cost. Imagine getting dozens of bills later, over several weeks or months for… the engine, drive train, tires, electronics, paint, dealer prep, transportation, administrative services, and even each rag used to polish the car at the dealer. That’s our “modern” healthcare system.